MORTGAGE FOR FOREIGN PEOPLE
There is a lot of mortgage products available in Spain, you can find a mortgage directly through your agency , with the bank or with a broker .
Most of the banks are speaking English and you can find the documents in English
To be prepared for you next purchase we have decided to give you some keys:
How can I borrow ?
It depends if you are or not resident
If you are not resident:
The first thing that you must know ist that you can obtain around 60-70 % of the price of the property , it means that you must have 40 % of the price more 13 % for the fees .
If you decide to be resident
It can be as for Spanish people, around 80 %
The lenders will decide after reviewing your personal and financial profile
What documents will the bank ask for?
The documents typically required by a bank are:
- Your . nie number (You must get apply for a NIE number before you can buy a property in Spain .)
- Your contract of employment
- Your last 3 payslips
- Your latest income tax return
- Your pre-agreement with the seller
- Proof that the IBI on the house is paid up
- Details of other mortgages or loans that you may have
- All property deeds, both in Spain and overseas
- Certificate from work authorities (vida laboral), showing your past work history
- Records of your current assets (bank/mutual fund statements, etc.)
- non-residents: A certificate of non residency (form available from the bank)
- If self-employed: LOCALED TAXES ON ECONOMICS
- If self-employed: Records of your assets during the last two years
- If self-employed vat tax you paid for the last quarter and last year
What kind of mortgage can I expect ?
Most are variable-rate mortgages, but since the last years you can also find fixed-rate and interest mortgages. In a variable-rate mortgage, repayments vary according to the Euribor the base rate set by the European Central Bank. A fixed rate will be in 2019 around 1.90 / 2.50 depending the bank , the guarantee that you can offer , your profile …
In addition to the price of the mortgage you must think that you will have to pay :
Property Valuation Fee: Before granting a mortgage, a Spanish lender will require the property to be valued by one of their own appointed appraisers. The buyer is responsible for this fee.
Mortgage Opening Fee: Many lenders charge a fixed fee of around 1% for setting up the mortgage.
Mortgage Insurance: It is a legal requirement of Spanish mortgages that you obtain general house and contents insurance. Depending on your circumstances, you might also consider life and mortgage insurance.
Mortgage Early Cancellation Fee: Buyers should be aware of this as it varies between lenders.
It can be around 0.50 %
Mortgage Notary Fee: the Notary must charge to register the mortgage ( both, bank and client )
Spanish Stamp Duty: (known as AJD) is a tax on mortgages which is paid to the government. It is calculated as a percentage of the mortgage. It’s a cost for the bank
Deed Arrangement Fee: The lender employs a gestoria to arrange for the deeds to be correctly registered at the Land Registry. Each are responsible for the gestoria’s fee. they will pay the gestoria fee + land register fee directly to the gestoria and they will do all the job for completing the registration ( ½ each )